A hedge fund betting against Tesla lost more in January than all of 2019
- Crispin Odey held a short position against Tesla at the end of January, The Financial Times reported Wednesday.
- The Odey European fund that held the position was down 11.2% at the end of the month, according to the FT.
- That's worse than the fund's performance in 2019, when it sank 10.1%, according to the report.
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Crispin Odey, who runs hedge fund Odey Asset Management, has been stung by Tesla's searing rally that's seen the stock double in 2020 alone.
Odey still held a short bet against Tesla in late January, The Financial Times reported Wednesday. The Odey European fund that held the short bet was down 11.2% at the end of January, according to the report. During the whole month of January, Tesla shares gained 55%.
That performance is much worse than the S&P 500, which was flat in January. It's also worse than Odey's fund performed in 2019, when it was down 10.1%, according to the report. In 2018, the fund gained 53%, The Financial Times reported.
Odey has held a short bet against Tesla for some time, according to The Financial Times, and held a similarly sized position at the end of 2018. He has also told investors in his fund that it felt like Tesla was entering the final stage of its life, according to the report.
Short-sellers have been badly burned by Tesla's parabolic rally. Mark-to-market, year-to-date losses for traders betting against Tesla swelled to as much as $11.47 billion on Wednesday, data from financial analytics firm S3 Partners show. Those losses were driven by a record rally that lasted nearly a week before Tesla shed as much as 21% in intraday trading Wednesday.
It's unclear if short covering has been a substantial driver of Tesla's surge, according to IHS Markit. A Tuesday note from the group showed that as much as 50% of short bets against the automaker could be convertible bond trade arbitrage, or position-hedging meant to protect from losses on either side of the trade.
In addition, a note from Citigroup said that short-sellers covering their positions could not alone explain Tesla's recent rally, the FT reported.
Still, a number of hedge funds and investors have announced short positions for better or for worse. On Wednesday, Andrew Left of Citron Research announced that he's short Tesla again, after previously promising he wouldn't bet against the stock.
In addition, David Einhorn's Greenlight Capital returned 14% in 2019, underperforming the S&P 500 due in part to the fund's short positions in Tesla and Netflix.
The automaker's rise has been too painful for some - on Wednesday, Steve Eisman of "The Big Short" fame said that he covered his short position in Tesla "a while ago."
Tesla has gained 112% year-to-date through Tuesday's close.
